Gross Commercial Leases

In a Gross Commercial Lease, the tenant pays the landlord a fixed
monthly fee for using the space. It is up to the landlord to cover all
the operating expenses of the building (liability insurance, property
taxes, etc.). While a gross lease may be more expensive than a net lease
initially, it can protect the tenant should operating costs increase
down the road. It's also generally a simpler lease, because it does not
require the allocation of operating costs among the tenants and
landlord.

Some of the most important things about a gross lease is determining
exactly how the landlord is calculating the rent, which often means
getting into the details of how the leased space is measured.

Commercial space may be rented by the square foot only, like a residential apartment (known as a gross lease); or by the square foot plus a portion of the landlord’s operating costs (a net, or triple net lease). Net leases are popular in multi-tenant situations. Gross leases are often seen in single-tenant situations, and they can include tricky variations

Applying a “loss factor” or “load factor” are ways that landlords foist the costs of maintaining common areas onto tenants with gross leases. Learning how these methods work means you won’t be surprised at the eventual true size of your rented space, or its true cost.